The Tell: BofA makes glass-half-full case for stocks, sees S&P 500 at 4,300 by year-end

by | May 22, 2023 | Stock Market

Strategists at BofA Securities are making a bull case for stocks, by targeting a year-end level for the S&P 500 that hasn’t been seen since last August. They lifted their year-end target on the S&P 500
to 4,300 from 4,000 previously, saying the end of the era of easy money “might be a good thing.” That’s because the U.S. is moving away from decades of “financially engineered growth,” and American corporations are shifting their focus to “structural benefits” such as efficiency, automation and artificial intelligence. One of the natural outcomes of the current environment is “more stable earnings,” the BofA team said.

BofA’s view comes at a time when the benchmark U.S. stock index has repeatedly failed to hold above 4,200, given lingering worries about the U.S. debt ceiling and the prospects of a recession. The bullish stance held by BofA is far from universal: Morgan Stanley equity strategist Michael Wilson said his firm sees “a much more dire outcome” than the consensus, and other analysts regard the 3-month Treasury bill
as a reasonable alternative to equities. In a note, equity and quant strategist Savita Subramanian and others at BofA said they relied on five indicators(see chart), w …

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